The reality of managing a property can often be completely different from what we imagine. Many see landlords and tenants as ‘us and them’, with misconceptions about each side not only affecting how they treat each other but also impacting crucial decisions which require solid objectivity.
Property management is not about squeezing tenants or looking for ways to dodge health and safety laws, nor is it about learning to grit your teeth in order to deal with dishonest renters. In truth, it’s a process which requires respect on all sides and strong attention to detail.
Here are just a few of the biggest misconceptions about managing properties, along with what you can expect in practice!
Many see landlords and tenants as ‘us and them’, with misconceptions about each side not only affecting how they treat each other but also impacting crucial decisions which require solid objectivity.
This is one which we’ll get out of the way immediately. Landlords do not have a licence to print money. In fact, the vast majority only let one or two properties. Unless these happen to be castles (or studio flats in Central London), this is hardly enough to make a living. Indeed, many landlords have day jobs or separate businesses which take up most of their time.
An important thing to remember here is that a large proportion of landlords obtain their properties via buy-to-let mortgages. This leaves them with another drain on their rental income, alongside repairs and maintenance, insurance and other overheads. Taking all this into account, you may find that your landlord’s ‘rental yield’, or profit, is actually surprisingly low.
There is definitely money to be made in the private rental sector, but don’t fool yourself into treating your landlords like out of touch rich folk!
Many landlords have day jobs or separate businesses which take up most of their time.
If you check the news even once a week then chances are that you have read plenty of horror stories about landlords treating tenants terribly and getting away scot-free. However, this is becoming much more of a myth. In most cases, a landlord who is caught mistreating tenants is held accountable and punished with appropriate fees, or even jail time!
The system is becoming increasingly skewed in favour of tenants when it comes to safety, property maintenance and even evictions. With the widespread use of camera phones and the likes of Shelter working to increase awareness of tenant rights, it has also become much easier for renters to recognise and prove when they are being illegally mistreated.
Landlords are commonly held accountable for:
Following a ‘Health and safety standards for rented homes (HHSRS)’ assessment, the council can force a negligent landlord to make any necessary repair and maintenance work.
With the widespread use of camera phones and the likes of Shelter working to increase awareness of tenant rights, it has also become much easier for renters to recognise and prove when they are being illegally mistreated.
Tenants may well expect their landlords to pay for absolutely everything in a rental property, especially if they believe the first misconception on this list.
While landlords are responsible for ensuring the safety of their properties, tenants are still responsible for basic maintenance. This includes the cost of changing light bulbs and buying cleaning supplies (a quick FYI: failing to keep a property clean is not considered ‘fair wear and tear’). Landlords are also not responsible for a tenant’s own personal belongings, except in cases where they are liable. An example would be if a landlord failed to address a reported repair issue and as a result a tenant’s belongings were damaged.
Remember, if a tenant fails to maintain a property, their landlord will be well within their rights to take money from the tenancy deposit in order to make repairs. However, if a landlord is asked to justify these deductions to an adjudicator, they will usually need a signed inventory report to do so.
Landlords are also not responsible for a tenant’s own personal belongings, except in cases where they are liable.
Despite what many chancers believe, this one is actually totally false. If a landlord plays games with a tenant’s deposit, it is actually fairly easy to hold them accountable for it, even if they don’t spend a penny.
Once a landlord receives a deposit, they are required by law to place it in one of the three government-approved deposit protection schemes within 30 days. They must also provide tenants with details of where the deposit is stored during this time.
The government-approved schemes include:
Whichever scheme is chosen, not only will it protect the deposit, it will also act as an adjudicator in the event of a disagreement over deductions.
A crucial thing to keep in mind here is that a landlord can be held accountable over failing to follow the rules at any point after a tenancy starts. If they cannot show proof that they stored the deposit appropriately, the tenant can claim back up to three times the amount as compensation.
Even with deductions, the burden of proof is usually on landlords. Unless they can prove that their deductions were necessary, any adjudicator will usually side with the tenant. An example would be if a landlord failed to get a signed inventory report and was thus unable to prove that a piece of furniture was damaged after a problem tenant moved in.
Once a landlord receives a deposit, they are required by law to place it in one of the three government-approved deposit protection schemes within 30 days.
There are always rogue tenants who look for careless landlords to take advantage of. Some treat landlords like servants, expecting them to turn up at the drop of a hat to fix any little thing that goes wrong.
Reasonably speaking a tenant cannot expect a landlord to operate in this way. As we mentioned previously, many landlords have other businesses or jobs to attend to; lives beyond their rental properties which take up most of their time. Property managers too usually have several homes to look after and cannot simply forget about their other responsibilities to suit the whims of one self-important renter.
Tenants should be provided with contact information for their landlord for when something goes wrong. For non essential jobs, it is usually best to give a landlord at least one to two weeks to hire a Pro. Only in emergencies should tenants expect an immediate response. After all, hiring a tradesman at short notice can leave a landlord with a much higher bill.
Allowing a reasonable amount of time for non-essential repairs and maintenance is not only fair, it can also help tenants to build more of a rapport with their landlords. Remember, if everyone gets along there will be far fewer potential problems!
For non essential jobs, it is usually best to give a landlord at least one to two weeks to hire a Pro.
Most property managers have been burned at some point by a bad tenant. While there are certainly terrible tenants who create problems, whether or not a property manager has to deal with them usually depends on their vetting process, rather than a general rule or rotten luck.
By not screening tenants, property managers put themselves at serious risk. Remember, a good tenant doesn’t just pay rent: they also look after a property and alert their property manager whenever a problem comes up. It’s just like interviewing somebody for an important job - a good manager wouldn’t just hire the first person to send in a CV!
All it takes to screen tenants is to ask a few questions and perform one or two background checks. The questions in a tenant interview should include:
If a tenant needs a guarantor, it is important to collect and verify contact information for them too. Responsible property managers may even contact a tenant’s previous landlords in order to collect references.
This might sound like a lot of work, but believe us when we say that doing this before signing a tenancy agreement is far less painful than having to deal with a dodgy tenant down the line. Plus, having to evict a tenant can cost over £2,000!
Responsible property managers may even contact a tenant’s previous landlords in order to collect references.
As we mentioned previously, most landlords only let out one or two properties and do not make a career out of it. As a result, some may not have the time and experience required for their role. In a case like this a landlord will usually hire a property manager to oversee things on their behalf, in exchange for a percentage of their rental income.
Whether or not this is necessary or ‘vital’ really depends on how much time and experience a landlord can bring to bear. A retired landlord for example may have enough time to organise repairs, maintenance, documentation and so forth, but may still need a property manager’s help to find tenants. Meanwhile, a green landlord with no clue about what their obligations are may need a property manager to help them learn the trade and avoid fees. An incredible successful landlord with a wide portfolio may simply not have enough time to handle each individual property’s needs.
When it comes to repairs and maintenance, platforms like Plentific certainly make it easier to operate without a property manager. These tools make it easy to find top tradesmen and receive reminders about when insurance or documentation needs to be updated.
So, are property managers essential? It varies from case to case. If you can maximise the potential of your lets and keep your tenants happy without a property manager, why spend the money? However, if you cannot, then attempting to make a small saving now could lead to far more expensive problems down the line.
If you can maximise the potential of your lets and keep your tenants happy without a property manager, why spend the money?
Tenants who are not used to dealing with landlords, or indeed contracts in general, may worry that the documents they have to sign are filled with unfair clauses and loopholes. While it is certainly important to read a contract before signing it, a landlord or property manager cannot insert a clause which trumps a law.
A fairly common example is when rogue landlords try to get around the minimum notice period for entering a tenant’s home. However, the law says that a tenant is entitled to at least 24 hours’ notice. This is not a right that a tenant can simply be tricked into forfeiting; if a landlord tries to do so, it would be considered an illegal and unenforceable clause.
However, there are certainly clauses which tenants should watch out for. ‘Tenant joint and several liability’, for example, makes tenants in a group responsible for paying the whole of their rent, even if one of them suddenly disappears. There are also ‘going away’ clauses which require tenants to inform landlords when they are leaving their property for any length of time.
In short, while a tenant does not have to worry about their legal rights being forfeit, it is still crucial that they read their tenancy agreements and any other documentation in full before signing.
While it is certainly important to read a contract before signing it, a landlord or property manager cannot insert a clause which trumps a law.